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Depreciation and sale of equipment : Downton Smith Ltd

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Depreciation and sale of equipment :

Downton Smith Ltd. purchased a piece of machinery on Jan 1st 2013 for €400,000. The company estimated a useful life of 10 years and a residual value of zero for this asset. On December 31st 2015, the company decided to sell the machinery for €350,000.

1. What is the accumulated depreciation of this piece of machinery on December 31, 2015 right before selling it?

€80,000

€120,000

€280,000

€320,000

2.  What is the gain or loss on the sale of this machinery at the end of 2015?

Gain of €50,000

Loss of €50,000

Gain of €70,000

Loss of €70,000